Sunday 18 February 2018

Elan chief Martin refuses to name departure date

John Mulligan

John Mulligan

Elan chief executive Kelly Martin has said the date of his eventual departure from the company "remains to be determined" and will be influenced by imminent results from trials of a potential Alzheimer's treatment.

Speaking yesterday as Elan unveiled second-quarter figures, Mr Martin declined to say if his departure would be delayed again if further results from the trials -- expected within weeks -- prove positive.

Mr Martin indicated earlier this year that he was postponing his resignation until results of trials into the experimental Alzheimer's drug, Bapineuzumab, are completed.

Elan has developed the drug in conjunction with Pfizer and a unit of Johnson & Johnson, and has a 25pc stake in it.

Initial results released earlier this week from a small part of the study, showed the drug wasn't effective in a particular patient group. Despite that ineffectiveness having been anticipated by the market, shares in Elan plunged as much as 20pc in Dublin. However, it's the results from remaining patient-groups taking the drug that will be far more pivotal to Elan.

Mr Martin declined to be drawn on whether his departure would be accelerated or delayed depending on the outcome of those results.

He also insisted that despite the share plunge this week, Elan continues to offer significant potential for investors.

"We built this company to move forward with or without Bapineuzumab," said Mr Martin.

"We can't control short-term movements in our stock up or down, the only thing we can do is focus on the fundamentals of the business and we've strengthened the capital structure, the balance sheet, there's good revenue growth and there's good progress in our science," he added.

Elan notched up $288m (€237.5m) in revenue during the second quarter, 6pc higher than in the same quarter last year. However, the figure was below analyst expectations and came despite the number of patients now using Elan's Tysabri multiple sclerosis drug rising 13pc to 69,100. Elan generates virtually all its income from the treatment, which it markets in conjunction with US firm Biogen Idec.

Elan's adjusted earnings before interest, tax, depreciation and amortisation declined 7pc to $35m. Its net loss narrowed by 39pc to $29m.

Elan chief financial officer Nigel Clerkin said the company's revenue figure hadn't kept pace with the growth in patient numbers due to factors including an 11pc decline in the value of the euro versus the dollar.

He said it had also been offset by a $16m reserve established, pending the outcome of a dispute with the Italian National Medicines Agency.

Mr Clerkin said Tysabri continues to have significant potential. Elan reckons that by 2016 about 900,000 people around the world will be on treatment for multiple sclerosis.

Shares in Elan closed down 4.6pc in Dublin at €9.34.

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